Average prices fell for the third month in a row at Fonterra's latest online dairy product auction overnight.Figures from the sale show the globalDairy Trade-trade weighted index for a basket of products at the auction fell 13.7 percent, having dropped 3.
Average prices fell for the third month in a row at Fonterra's latest online dairy product auction overnight.
Figures from the sale show the globalDairy Trade-trade weighted index for a basket of products at the auction fell 13.7 percent, having dropped 3.5 percent in June after falling 0.8 percent in May.
In April, prices at the trading event had lifted sharply with the average price for whole milk powder rising 21 percent to $US3969 per tonne. Overnight the average price for whole milk powder fell 14.8 percent from a month earlier to $US3224.
Paul Grave, globalDairy Trade manager, said previously the market had been supply driven with concerns about lack of product being available, mainly driven by drought in this country, reduced supply in Australia and a slow start to the European season.
"We're now selling our next season's production, and Europe's in full peak production, so supply concerns have largely eased.
"So the equation now moves to demand, and consumer demand is really the key thing that we need to focus on," Mr Grave told Radio New Zealand.
The overnight trading event was successful with everyone still buying, and $US160 million ($NZ230m) of product sold to 111 bidders worldwide.
But there were renewed issues about how robust the global economy was, with concerns about a double dip recession, and that affected how much buyers were prepared to purchase, Mr Grave said.
"Particularly they become concerned to buy any more than their known requirements, and in particular become reluctant to purchase too far into the distant future."
